Europe’s First Rate Hike May Be Coming This Week
- Twelve of 22 economists expect policy tightening on Aug. 3
- Czech currency interventions have energized growth, inflation
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The Czech Republic may kick off Europe’s monetary-tightening cycle this week, jumping ahead of its peers after three years of stimulus fueled price growth that’s sputtered on the rest of the continent.
Economists are almost evenly split, with 12 of the 22 surveyed by Bloomberg last week saying the Czech National Bank would raise its benchmark to 0.25 percent at its Aug. 3 meeting from a record-low 0.05 percent. The rest predicted no change. If there’s a hike, it will be the first in more than nine years, and it would boost the appeal of koruna assets as other rate setters stay put and the European Central Bank holds off on announcing curbs to its quantitative-easing program until fall.